the way that i am seeing this pattern, the finished BLOCK should measure 12.5" which includes 1/2" for connecting the block to others, meaning two 1/4" seams, one on each side. when the quilt is finished, that block will only be 12". you should have a 1/4" seam allowance where your points are at the edge. does this make sense? please let me know if i have not explained it clearly.
or maybe i'm not understanding what you've written? if it is that your seam allowance at the points is not 1/4", then you have a different dilemma. if the allowance is almost 1/4", just sew across where the point is. then, when you press the finished quilt top square, that little bit of extra block will be absorbed.
it takes a lot of practice to get 1/4" seams at the edge points. it's because you are working with bias edges. did you starch the fabric well before cutting the bias edges? that helps a lot.